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USD/CHF: DOWNWARD PATH WILL EVENTUALLY RESUME – UBS

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Economists at UBS analyze USD/CHF outlook.


Range-trading 

We expect USD/CHF to trade in a large 0.88-0.94 range.


In the short term the USD remains well-bid with the Fed holding high rates for longer as growth is more resilient. This should keep yield differentials in favor of the USD amid an SNB on hold. The SNB committed to protect Switzerland against imported inflation and should prevent the CHF from weakening too much as well.


The downward path for USD/CHF will eventually resume but strongly hinges on the Fed cutting interest rates next year.


We see the risks in USD/CHF as largely balanced for now.

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